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NASDAQ-listed coal mining giant Alliance Resource Partners (ARLP) has announced its entry into the cryptocurrency market by investing $30 million in Bitcoin (BTC) mining. This unexpected step was revealed during the company’s latest earnings call, highlighted by CFO Cary Marshall.
Alliance Resource Partners’ Entry into Bitcoin Mining
“In the second half of 2020, we started Bitcoin mining as a pilot project at our River View mine to monetize already paid but underutilized electrical load,” explained Marshall, showcasing the strategic use of excess power at their facilities. This innovative approach not only maximized existing resources but also diversified the company’s revenue streams.
Despite initial skepticism, Alliance Resource Partners’ foray into Bitcoin mining has proven to be efficient. Moreover, Marshall revealed that the company currently holds 425 BTC worth $30 million on its balance sheet. Impressively, after accounting for the net costs of property, plant, and equipment, Alliance Resource Partners reported a net gain of $7.3 million, signaling a promising venture into the cryptocurrency market. Following the strong quarterly earnings report, ARLP shares rose over 2% in pre-market trading.
To avoid misunderstandings, Alliance Resource Partners clarified that it has not invested in Bitcoin but rather utilized its existing equipment for cryptocurrency mining. “We have built an efficient data center for Bitcoin mining, leveraging our low energy costs, and we have some extra capacity that we rent out to other Bitcoin miners,” said Marshall. This demonstrates Alliance Resource Partners’ commitment to optimizing resources while capitalizing on the increasing demand for Bitcoin mining.
Small But Significant
Although Alliance Resource Partners’ BTC holdings may seem small compared to industry giants like MicroStrategy and Tesla, which hold assets worth $13.5 billion and $615 million respectively, their entry into the cryptocurrency market marks an important milestone. As Bitcoin continues to rise, Alliance Resource Partners’ move is an indicator of their adaptability and willingness to explore unconventional growth avenues.
Current data shows BTC up 1.3% in the last 24 hours, valued above $63,000. The data also indicates that the largest cryptocurrency has fallen 4.54% in the last 7 days and 9.49% in the last 30 days.
